Luxembourg
11 December 2012
Reporter: Georgina Lavers
Securities Lending default image
Alfi reveals how to service Islamic funds in Luxembourg
The Association of the Luxembourg Fund Industry (ALFI) published a collection of best practices for setting-up and servicing Islamic funds to provide a greater level of understanding of a growing market sector.

Marc Saluzzi, chairman of ALFI, said: “2012 has been a very active year for the Luxembourg Islamic finance community with several new Shariah-compliant funds launched. Luxembourg currently ranks No. 5 worldwide and first in Europe in the number of Shariah-compliant domiciled funds, at 41 funds with €4 billion in assets under management."

The best practices also give a high level indication of whether Islamic finance instruments are compatible with Luxembourg UCITS laws. A number of Shariah-compliant funds have adopted the UCITS structure, given the focus on investor protection of UCITS funds and the fact that UCITS funds have rigorous investment policies that accommodate the principles underlying Islamic finance.

Saluzzi continued: “Setting-up a Shariah-compliant UCITS fund in Luxembourg, opens the doors of the more than 70 countries around the world in which Luxembourg UCITS funds are currently distributed."

“There are also a number of Shariah-compliant private equity and real estate structures established in Luxembourg and the European distribution passport created by the AIFM Directive will offer new opportunities for these products.”

In January 2010, the Luxembourg direct tax authority published a circular on Islamic finance, clarifying the tax treatment of murabaha contracts and sukuk transactions. This was followed, in June 2010, by a circular from the indirect tax authority clarifying the treatment of murabaha and ijara contracts.

More news
The latest news from Asset Servicing Times
Join Our Newsletter

Sign up today and never
miss the latest news or an issue again

Subscribe now
MainstreamBPO to expand in Europe and Cayman through Trinity acquisition
23 May 2017 | Sydney | Reporter: Stephanie Palmer
MainstreamBPO has entered into an agreement to acquire Trinity Fund Administration in Dublin and the Cayman Islands
Julius Baer builds on UK and Ireland compliance team
22 May 2017 | London | Reporter: Stephanie Palmer
Julius Baer International has appointed John Dodds as head of compliance for the UK and Ireland
Clearstream sees slight April upticks
22 May 2016 | London | Reporter: Stephanie Palmer
According to Clearstream’s monthly figures report, assets under custody increased from the €13.03 trillion recorded in April 2016
LGPS board releases transparency code for managers
22 May 2017 | London | Reporter: Drew Nicol
Asset managers looking to claim mandates from the LGPS pooling initiative can now sign up to a new fee transparency code ahead of the April 2018 deadline
SimCorp selects new managing director for APAC
22 May 2017 | Singapore | Reporter: Stephanie Palmer
Investment management solution provider SimCorp has appointed Oliver Johnson as its new manging director for the Asia Pacific (APAC) region
Asset managers tackle Chinese bond market issues
19 May 2017 | Beijing | Reporter: Drew Nicol
Hong Kong asset managers met in Beijing to discuss the challengers surrounding China’s lucrative bond market
Canadian securities regulator expands T+2 proposals
19 May 2017 | Toronto | Reporter: Drew Nicol
The Canadian Securities Administrators has released its final proposal for the transition of mutual funds and equity and long-term debt to T+2 on 5 September
More news